Eurozone economy likely contracted in the third quarter
US job vacancies unexpectedly surge, highlighting labour market’s continued resilience despite rate hikes
The eurozone private sector sustained another contraction in the third quarter as the manufacturing and services sectors were hit by weak demand, final results of a survey among the regions’ purchasing managers showed on Wednesday.
HCOB’s final Composite Purchasing Managers’ Index (PMI), compiled by S&P Global, inched up to 47.2 in September from August’s 46.7. The PMI is a closely-watched measure of overall economic health of the currency bloc’s economy.
“The drop in retail sales in August and weakness in the final PMIs for September are consistent with our view that the eurozone economy will fall into recession in the second half of 2023,” Capital Economics’ Franziska Palmas said.
Meanwhile, in the US, employment vacancies unexpectedly surged in August, highlighting the continued resilience of the labour market, according to the Labour Department’s Job Openings and Labour Turnover Survey (JOLTS) released on Tuesday.
Job openings totalled 9.61 million for the month, an increase of almost 700,000 from July and well above economists’ estimate for 8.8 million. Job openings are closely monitored by the Federal Reserve, the US central bank, which has been raising interest rates for the past 19 months to combat inflation by cooling the economy and reducing labour demand.
Finally, German exports fell more than anticipated in August, data released last week by the federal statistics office, Destatis, showed.
Exports during August totalled €127.9 billion, falling by 1.2 per cent from the prior month. Economists had predicted a decline of one per cent.
On the other hand, imports fell by 0.4 per cent compared with July, to a total of €111.4 billion. The trade surplus, the difference between exports and imports, rose slightly to €16.6 billion.
The weakness in exports comes on the heels of weak global demand and worsening structural issues as the weakening of the euro currency since the summer is still not enough to have any significant impact on exports, ING economist Carsten Brzeski said.
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